Professional Fees in Corporate Bankruptcies: Data, Analysis, and Evaluation

ISBN : 9780195337723

Lynn M. LoPucki; Joseph W. Doherty
336 Pages
162 x 239 mm
Pub date
May 2011
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Bankrupt Enron paid well over a billion dollars in cash to bankruptcy lawyers, financial advisors, and other bankruptcy professionals. The managers of most bankrupt companies pay the professionals with money that would otherwise have gone to creditors, employees, shareholders, or to saving the companies. To prevent excessive payments, the bankruptcy code and rules establish an elaborate system for public reporting and court approval of professional fees. Armed with the ability to choose among courts that want or need to attract the cases, the professionals have largely taken charge of the fee-control system and rendered it toothless. The professionals ignore many of the governing rules and the courts do nothing about it. Effective methods for assessing and controlling fees do exist, but it is not in the interests of the courts or the professionals to apply them. Professional Fees in Corporate Bankruptcies: Data, Analysis, and Evaluation, by Lynn M. LoPucki and Joseph W. Doherty is based on a study of thousands of documents from the court files in over a hundred of the largest bankruptcy cases. It employs statistical analysis and documents its findings, and provides an unprecedented window on the worlds of bankruptcy professionals, professional fees, and their scientific study. Through that window, readers see both a disturbing picture of a legal system in crisis and a hopeful one with opportunities for desperately needed reform. The authors have nevertheless written it for readers with technical backgrounds in neither bankruptcy nor statistics. This book will be of interest not only to scholars studying professional fees, but also to bankruptcy professionals, judges, policymakers, and anyone interested in the functioning of law-based systems.


Part I: Cost Assessment
Chapter 1. Cost Measurement
Chapter 2. The Empirical Study
Chapter 3. Aggregate Costs
Chapter 4. Cost Calculators
Chapter 5. Component Costs: Description
Chapter 6. Component Costs: Analysis
Part II. Cost Control
Chapter 7. The Need for Cost Control
Chapter 8. The Cost of Cost Control
Chapter 9. Fee Objections
Chapter 10. Fee Cuts
Chapter 11. Cost Control Failure
Chapter 12. Toward Effective Cost Control Methods
A. The Sample Cases
B. Variables Used
C. Glossary

About the author: 

Lynn M. LoPucki is the Security Pacific Bank Professor of Law at the UCLA School of Law. Joseph W. Doherty is the Director of the Empirical Research Group (ERG) at the UCLA School of Law.

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